Allegiant Travel Company (ALGT, Financial) filed Quarterly Report for the period ended 2009-06-30.
Las Vegas-based ALLEGIANT TRAVEL COMPANY is focused on linking travelers in small cities to world-class leisure destinations such as Las Vegas Nev. Phoenix Ariz. Fort Lauderdale Fla. Orlando Fla. and Tampa/St. Petersburg Fla. Through its subsidiary Allegiant Air LLC the Company operates a low-cost high-efficiency all-jet passenger airline offering air travel both on a stand-alone basis and bundled with hotel rooms rental cars and other travel related services. Allegiant Travel Company has a market cap of $839.2 million; its shares were traded at around $41.5 with a P/E ratio of 11.3 and P/S ratio of 1.7.
System available seat miles (ASMs) increased by 24.7% as a result of a 25.5% increase in departures offset by a 1.1% decrease in average stage length. We had a decrease in system operating revenue per ASM (RASM) of 9.8% from 11.16 cents for the three months ended June 30, 2008 to 10.07 cents for the same period in 2009. The decrease was mainly attributable to a reduction in our scheduled service average base fare of $18.40 or 22.0% which was partially offset by an increase in ancillary revenue per passenger from $27.75 for the second quarter 2008 to $32.36 for the same period in 2009.
Scheduled service revenue. Scheduled service revenue increased 2.4% to $89.7 million for the three months ended June 30, 2009, from $87.6 million in the same period of 2008. The change was a result of a 31.3% increase in the number of scheduled service passengers offset by a decrease in the scheduled service average base fare of $18.40 from $83.56 to $65.16. Scheduled service passenger growth was driven by a 30.7% increase in scheduled service departures with scheduled service load factor relatively flat. The impact of the current economic environment on air travel demand, introductory pricing related to entrance into our sixth leisure destination and the expansion of our existing markets were the primary drivers for the reduction in our scheduled service average base fare.
Ancillary revenue. Ancillary revenue increased 53.0% to $44.5 million in the three months ended June 30, 2009 up from $29.1 million in the same period of 2008, driven by a 31.3% increase in scheduled service passengers and a 16.6% increase in ancillary revenue per scheduled passenger from $27.75 to $32.36. The increase in ancillary revenue per scheduled passenger was primarily due to higher prices charged for certain existing products including assigned seating, customer convenience fee and checked baggage.
Other revenue. We generated other revenue of $4.2 million and $2.2 million during the three months ended June 30, 2009 and 2008, respectively. The revenue was generated as a result of the April 2008 purchase of six MD-80 aircraft and three engines on lease to another airline. Four of these aircraft have since been returned to us, three have been placed in service prior to the end of second quarter 2009 and one has been placed into service since June 30, 2009. We expect to receive the two remaining aircraft during the third quarter of 2009 and place them into service during the fourth quarter of 2009. In addition, we recognized $3.7 million in supplemental rents during the second quarter 2009, which comprised maintenance deposits on three aircraft where reimbursements for future maintenance events were not deemed probable.
Aircraft fuel expense. Despite our significant year-over-year expansion of service, aircraft fuel expense decreased 41.9% to $41.8 million for the three months ended June 30, 2009, down from $72.1 million for the same period of 2008, primarily driven by a 52.8% decrease in the average cost per gallon to $1.66 from $3.52. Gallons consumed increased to 25.2 million from 20.5 million attributable to our 25.5% system departure growth.
Read the The complete ReportALGT is in the portfolios of Ken Heebner of CAPITAL GROWTH MANAGEMENT LP, Arnold Van Den Berg of Century Management, PRIMECAP Management.
Las Vegas-based ALLEGIANT TRAVEL COMPANY is focused on linking travelers in small cities to world-class leisure destinations such as Las Vegas Nev. Phoenix Ariz. Fort Lauderdale Fla. Orlando Fla. and Tampa/St. Petersburg Fla. Through its subsidiary Allegiant Air LLC the Company operates a low-cost high-efficiency all-jet passenger airline offering air travel both on a stand-alone basis and bundled with hotel rooms rental cars and other travel related services. Allegiant Travel Company has a market cap of $839.2 million; its shares were traded at around $41.5 with a P/E ratio of 11.3 and P/S ratio of 1.7.
Highlight of Business Operations:
We recorded total operating revenue of $148.0 million, income from operations of $37.8 million and net income of $23.9 million for the three months ended June 30, 2009. By comparison, for the same period in 2008, we recorded total operating revenue of $131.6 million, income from operations of $4.7 million and net income of $2.6 million.System available seat miles (ASMs) increased by 24.7% as a result of a 25.5% increase in departures offset by a 1.1% decrease in average stage length. We had a decrease in system operating revenue per ASM (RASM) of 9.8% from 11.16 cents for the three months ended June 30, 2008 to 10.07 cents for the same period in 2009. The decrease was mainly attributable to a reduction in our scheduled service average base fare of $18.40 or 22.0% which was partially offset by an increase in ancillary revenue per passenger from $27.75 for the second quarter 2008 to $32.36 for the same period in 2009.
Scheduled service revenue. Scheduled service revenue increased 2.4% to $89.7 million for the three months ended June 30, 2009, from $87.6 million in the same period of 2008. The change was a result of a 31.3% increase in the number of scheduled service passengers offset by a decrease in the scheduled service average base fare of $18.40 from $83.56 to $65.16. Scheduled service passenger growth was driven by a 30.7% increase in scheduled service departures with scheduled service load factor relatively flat. The impact of the current economic environment on air travel demand, introductory pricing related to entrance into our sixth leisure destination and the expansion of our existing markets were the primary drivers for the reduction in our scheduled service average base fare.
Ancillary revenue. Ancillary revenue increased 53.0% to $44.5 million in the three months ended June 30, 2009 up from $29.1 million in the same period of 2008, driven by a 31.3% increase in scheduled service passengers and a 16.6% increase in ancillary revenue per scheduled passenger from $27.75 to $32.36. The increase in ancillary revenue per scheduled passenger was primarily due to higher prices charged for certain existing products including assigned seating, customer convenience fee and checked baggage.
Other revenue. We generated other revenue of $4.2 million and $2.2 million during the three months ended June 30, 2009 and 2008, respectively. The revenue was generated as a result of the April 2008 purchase of six MD-80 aircraft and three engines on lease to another airline. Four of these aircraft have since been returned to us, three have been placed in service prior to the end of second quarter 2009 and one has been placed into service since June 30, 2009. We expect to receive the two remaining aircraft during the third quarter of 2009 and place them into service during the fourth quarter of 2009. In addition, we recognized $3.7 million in supplemental rents during the second quarter 2009, which comprised maintenance deposits on three aircraft where reimbursements for future maintenance events were not deemed probable.
Aircraft fuel expense. Despite our significant year-over-year expansion of service, aircraft fuel expense decreased 41.9% to $41.8 million for the three months ended June 30, 2009, down from $72.1 million for the same period of 2008, primarily driven by a 52.8% decrease in the average cost per gallon to $1.66 from $3.52. Gallons consumed increased to 25.2 million from 20.5 million attributable to our 25.5% system departure growth.
Read the The complete ReportALGT is in the portfolios of Ken Heebner of CAPITAL GROWTH MANAGEMENT LP, Arnold Van Den Berg of Century Management, PRIMECAP Management.
